The Joint Legislative Committee on Performance Evaluation and Expenditure Review recommended Harrison County consolidate its work centers and tighten control of the $500,000-a-year escrow fund and its road and bridge money.
It also asks the Legislature to pass a law limiting spending on advertising by counties. The county Board of Supervisors spent about $100,000 a year the past two years on advertising.
Board attorney Tim Holleman said the county disagrees with many of the findings and the ones it agrees with were mostly relatively small clerical errors.
“For the most part they say the county is complying with the law,” he said. “They just don’t like some of the decisions. Ultimately we are complying with the unit system but they don’t like that there are five work centers.”
PEER’s recommendations came in a Jan. 8 report on an investigation the committee began after it received complaints about the “mismanagement of Harrison County resources” and questions about the county’s compliance with the unit system of government. It does not say who made the complaints and Holleman said he doesn’t know either.
Holleman said PEER didn’t give the county enough time to respond in detail and then didn’t publish its limited response. PEER Executive Director James Barber said the committee usually gives a governing body 10 business days to respond. He said PEER released this report before the 10 days was up because of a comment made by a supervisor on social media.
“Despite being cautioned about PEER procedures in a meeting with PEER staff on January 10, a member of the Harrison County Board of Supervisors made a public comment in a Facebook posting about the Board being ‘audited,’” Barber wrote in an email. “This comment generated inquiries of our staff from legislators, the public, and a media outlet about the existence of a PEER report. Under these circumstances, we proceeded to release the report without a formal response from the Board of Supervisors.”
He said PEER gave confidential copies of the report to county administrator Pam Ulrich and her staff, which prepared a response.
“Because the document that we received from Harrison County staff (and not the Board’s attorney) was not the official response of the Board, as was made plain to us, we did not consider it to be appropriate to include it as a response to the report,” Barber said. “We believe the report speaks for itself, and hope that the board, and its staff, will take the constructive criticism offered in the report, and make the necessary changes to improve the fiscal and programmatic accountability for Harrison County’s taxpayer dollars.”
PEER said the county has spent money raised through the road and bridge tax on recreational facilities such as splash pads, ballparks and fairgrounds, which it said violated state law.
Holleman said the county normally reimburses the Road Department from its general fund for work such as building splash pads. But, he said, the county believes the Road Department can build and repair roads in parks and the fairgrounds with no need for reimbursement.
PEER also questioned the county’s escrow fund spending, which it said is in compliance with the law.
“Although within the scope of state law, the Harrison County Board of Supervisors expends escrow funds imprudently without any measurable benefit to the county as a whole,” the report said. “For fiscal years 2016 and 2017, Harrison County allocated $537,834.56 and $494,226.41, respectively, from the Escrow Fund among the county’s five supervisor districts to allow each supervisor to make decisions regarding specific expenditures. In addition, the Harrison County Board of Supervisors expended $98,364 and $106,709 in escrow funds during fiscal years 2016 and 2017, respectively, for advertising in event programs and other printed materials, banners, signage, and T-shirts or sports jerseys.”
Holleman said advertising is a legitimate way to contribute to groups that benefit the county. He said the county is authorized by state law to spend up to to one mil, which in Harrison County would bring in just under $2 million, on advertising. He said the county spends a fraction of what it is allowed by state law and a tiny fraction of the county budget.
“These are citizen taxpayer groups coming to the county asking the county to support their group by advertising in their manual or whatever they are putting out,” he said. “Look at them. They are ball fields. It’s Cruisin’ The Coast. That certainly contributes to the financial well-being of the county. Mardi Gras. That brings in tourism. They are things that benefit the county as a whole.”
PEER said the county should reconsider its practices of dividing the escrow funds among supervisors.
“The board should formally adopt a resolution stating its intent to use such collections for the county as a whole,” the report said. “However, should the board choose to continue its current practice, the county comptroller should create unique account numbers in the county’s accounting system for each supervisor’s district that can be utilized to determine escrow expenditures by district.”
Holleman said the escrow fund is supposed to ensure every district receives some benefit from the roughly $500,000 allocated each year.
“These supervisors constantly combine their escrow balance of funds to do projects that benefit the county as a whole,” he said. “If a department comes in and needs a truck and they don’t have it in their budget, a supervisor will say I’ll pay half of it out of my escrow fund if you pay half of it out of your fund. The report implies that the supervisors spend individually from these funds. They do not. Everything has to go through the normal purchasing laws. The item has to be a legal expenditure. It has to be approved by the board. It has to go through a quote process.”
He said smaller amounts are approved through the claims docket but larger amounts have to come before the whole board.
PEER also said it found 33 instances from 2016-2017 where the county did not follow state law or county travel policies when spending on travel. It said supervisors failed to provide receipts after receiving a travel advance and claimed reimbursement for expenses prepaid by the county. Holleman said those were mainly the caused by clerical errors.
“One bill had two glasses of wine and a bloody mary on it,” he said. “The supervisor marked it off the bill and turned it in. In the process, whoever handled it did not deduct those charges. But the supervisor had marked through it.”
PEER said the county should hire a certified public accountant to review escrow, travel and road and bridge spending. It said that CPA firm should form an opinion on the county’s financial control and suggest ways to improve control if it is found to be too lax.
It also found executive sessions between October 2015 and September 2017 did not comply with the state’s Open Meetings Act and said the county should consult with the Ethics Commission on how to tell the public of the reasons for going into executive session.
Holleman said the board would announce it was going into closed session to discuss whether it should go into executive session for particular reasons. It would come out of the closed session to announce it was going into executive session but didn’t restate the reasons.